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IPOs and Rights Issues / CDSL - Review / Recommendation
« Last post by resh on June 15, 2017, 10:14:29 PM »
The Central Depository Services Ltd. (CDSL) is going Public with an IPO and here are the brokerage reviews of the same.

Dalal & Brocha said,

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At the upper end of the issue price Rs 149, the P/E ratio of the company works out to 18.2x on FY17 EPS of Rs 8.2. On P/BV, stock would trade at 2.9x on FY17 BV of Rs 51. Company delivered long term average ROE of 16.6% during FY13-17 period. We expect the company to grow at nominal GDP growth rate (~12%) for long term with stable profitability, hence, long term investor should SUBSCRIBE with a long term view.

Motilal Oswal's recommendation is as below

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CDSL is the second largest depository in terms of market share and has been growing at decent CAGR of 23%/14% in 3/5 years (and revenues grew by 13%/18%). Further, the key positive about the company is that it has controlled operating expenses in last 3 years which has led to significant margin expansion of 1150 bps since FY15 to 54% in FY17. At the upper band of INR149, the offer is available at 18.2x FY17 EPS which we believe is attractive considering - 1) strong parentage and entry barrier 2) stable earnings growth 3) strong margins and 4) decent ROE of 16%. Hence we recommend to SUBSCRIBE for long term investment.

K R Choksey has the following, review and recommendation

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In terms of valuation, on the upper price band of INR 149, it has been valued at 18.2x on FY17 earnings. We believe, valuations are reasonable given the robust business outlook along with decent financial performance over FY12-17 i.e. Avg OPM: ~48%, Avg
NPM: ~60%, Avg ROE: ~16% and Avg FCF/Revenue: ~23%. Hence, we recommend ‘SUBSCRIBE’ rating on the issue.

IIFL Wealth Management analysts said,

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During FY15-17, CDSL posted decent revenue CAGR of 17.8% while operating margin improved significantly from 44% in FY15 to 54.5% in FY17. As the company is the first depository to get listed on the bourses, there are no comparable valuations as such. However, we are upbeat on the IPO and recommend ‘subscribe’ given its strong fundamentals and clean balance sheet.

Aditya Birla Money has the following Rating,

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Steady growth, asset-light nature of business and decent RoE of ~20% shall enable the stock to command high valuation. Asset light nature of business enables the company to distribute 35-50% of profits as dividend. In FY17, it had paid ` 3/share as dividend. The IPO is attractively priced with TTM PE of 18x at higher price band of ` 149. Recommend SUBSCRIBE on the issue.

LKP Research has the following Review,

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We believe that the company would continue to grab a bigger market share of the incremental demat accounts because of its lower net worth & reserve requirements and wide geographic coverage. Considering the duopolistic nature of the depository business, high barriers of entry, operational leverage, healthy margins, robust free cash flows & ample reserves parked in investments, we recommend a SUBSCRIBE on the CDSL IPO.

Destimoney Securities has the following Review,

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On valuation front, even though no listed peer exists, at the upper price of Rs. 149, the PE multiple of 18x and EV/EBITDA multiple of 12.6x it does not seem to be expensive considering the strong balance sheet and earnings and the healthy return ratios. Therefore, we recommend to SUBSCRIBE the issue at cut off price.

Ambit Capital analyst Bhargav Buddhadev said,

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Moreover, CDSL is a strong play on the financial inclusion theme and its business model is less cyclical than that of stock brokers that trade at a median 36.1x FY17 P/E. Digitisation opportunity from insurance policy and academic certificates is a call option; these revenue streams is also annuity and competition in these segments is limited. We are POSITIVE on the IPO.
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IPOs and Rights Issues / Eris Lifesciences - Review / Recommendation
« Last post by resh on June 15, 2017, 09:54:17 AM »
Here are all the analyst Recommendations of Eris Lifesciences IPO. Keep checking as we keep updating the reports as more analysts release the same exclusively to us.

IIFL Wealth Management Analysts said,

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Though Eris commands a mere 0.7% of the domestic market share, it competes with the likes of Lupin, Glenmark in cardio and diabetes prescription by virtue of its niche focus. Eris posted 16.5% revenue and 43% PAT CAGR over FY13‐17 with impressive RoEs. The IPO is priced at a 34x trailing PE, a valuation in line with those of MNC pharma and ahead of domestic players like Alkem Labs.

ICICI Direct Analysts Siddhant Khandekar, Mitesh Shah and Harshal Mehta said,
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At the upper band of Rs 603, the stock is available at 34.3x FY17 EPS of | 17.6. We have assigned SUBSCRIBE recommendation to the  issue based on management dynamism, robust financial performance, healthy return ratios, leverage free balance sheet and strong free cash flows. A superior business and financial matrix justify the premium valuation.

Angel Broking Analyst Shrikant Akolkar said,

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While most pharma companies are currently facing issues on several fronts, this business model looks attractive with no USFDA concerns and pricing pressure. Considering the company’s superior growth, better margin profile and high return ratios, we rate this IPO as SUBSCRIBE.

SMC Global has given a 2/5 Rating for the IPO

Gupta Equities has the following Recommendation,

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Eris Lifesciences Ltd stands to gain from operating leverage. At a P/E of 34.24x of FY17 EPS. We believe that it demands a discount to its domestic peers. We assign a Subscribe rating to the IPO.

BP Wealth has the following Review,

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On the global front, since Eris Lifesciences has no revenue from exports it is safe from any USFDA issues. At the upper band price of Rs. 603 per share, the PE multiple as per the FY17 earnings is 34x and an EV/EBITDA multiple of 28x. Taking into consideration the above factors, we give a SUBSCRIBE rating for Eris Lifesciences with a long term perspective.

Chaturya Agarwal of IDBI Capital said,

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Return rations are good for Eris and with focus in the domestic market which is poised to grow at 12-15% CAGR over 2016-20E we feel growth in the ERIS is not a concern. However, the impact of newer acquisitions plan in terms of value and quality will have to be seen, also inspite of being a strong player, we feel it is expensive. SUBSCRIBE RATING

Motilal Oswal Said

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At upper price band of INR603, the issue is available at 34x FY17 EPS which is at par with other listed players. We remain positive on the company and we believe it deserves premium valuation as 1) it is high growth story led by significant focus on lifestyle related disorders, 2) significantly higher margins, 3) debt free status and 4) superior return profile of 45%+ both ROEs and ROCEs. Hence we recommend to SUBSCRIBE for long term investment.

SSJ Finance said,

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We believe that the IPO is priced at a substantial premium to its peers but since company has a very good track record we recommend to Subscribe for long term investment.
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IPOs and Rights Issues / Tejas Network - Review / Recommendation
« Last post by resh on June 12, 2017, 02:50:31 PM »
Here are the various research reports on the IPO of Tejas Network.

Amod Joshi of SPA Capital said,

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Tejas is likely to report EPS of 12.56 in FY19E (assuming PAT grows 30% in next 2 years). At the upper end of the price band, the stock is available at P/E of 20.5x based on FY19E earnings, which is reasonable considering immense growth potential in India (<20% cell towers are connected on fibre vs 70-80% developed countries) and leadership position in India. We recommend SUBSCRIBE to the issue with long term perspective.

Prabudas Liladhar has the following recommendation,

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We believe that Tejas Networks could have benefited from PSU contracts which are visible in the strong growth from revenues from PSU clients. We note revenues from PSU clients grew by 80% CAGR over FY15-FY17 and was the key driver for incremental revenues. Revenues from Private customers in India grew by only 20% CAGR over FY15-FY17 despite huge build-outs from Private Telco. Revenues from International clients has grown at 45.6% CAGR over FY15-FY17. Major International clients include Ciena and Sacofa. At Rs257/sh, the company is being valued at 24x FY17 Adjusted EPS and 15x FY19E EPS (Based on our assumptions). We would Avoid the issue.


SMC has given a rating of 2.5 / 5.0

ICICI Direct's Bhupendra Tiwary and Sneha Agarwal said,
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Tejas' operating revenues and EBITDA has grown at a 24.2% and 40.9% CAGR respectively over FY13-17 to | 878.2 crore and | 174.2 crore respectively. Given the sharp growth in topline, the company has benefited from the operating leverage and the margins have expanded from 12% in FY13 to 19.8% in FY17. At the IPO price band of | 250-257, the stock is available at a multiple of 35.6-36.4x FY17 EPS.

Dalal & Brocha have the following VIEW

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We would advise investors to keep the stock in radar to Accumulate on dips post listing. Currently the issue is Fairly Priced. At the upper price band of Rs. 257 TNL trades at a P/E of 36x its FY17 EPS of Rs 9.4 and 14x EV/EBIDTA and in-terms of P/BV it is at 3.63x.
We would recommend the investors to AVOID the issue.

Motilal Oswal said,

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Tejas Networks revenues grew by 51% CAGR over FY15-FY17. This was the phase of network investments by Telco to boost the increased Data consumption of subscribers and government initiatives on Digital India. At Rs257/sh, the company is being valued at 24x FY17 (Pre-issue reported EPS)

Gupta Equities Capital said,

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Tejas Networks Ltd stands to gain from operating leverage. At a P/E of 27.34x of FY17 EPS. We believe that it demands a discount to its domestic peers. We assign a Subscribe rating to the IPO.

Jaikishan J Parmar of Angel Broking said,
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At the upper end of the price band, the pre-issue P/E works out to be 29.3x its 2017 earnings, 3.7x of FY2017 Book Value. Moreover, the company’s debt free balance sheet post IPO coupled with the government’s push for digital India would support the growth momentum. Thus, we recommend a SUBSCRIBE on the issue.

SSJ Finance Analyst ATISH MATLAWALA said,

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Tejas Networks Ltd has reported a CAGR of 24.2% and 40.9% on the sales and Ebitda fronts respectively over FY2013-2016. On its upper band of price of Rs 257, the issue is priced at P/E ratio of 28.8x of its FY2017 EPS of Rs 8.9. We believe that the IPO is overpriced leaving little for the investors. Hence, we recommend to Avoid the IPO.

Quant Capital Analyst Saurabh Deshpande said,

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Majority of the business is from PSUs, so improvement on receivable days might not materialise to a desired extent. It faces steep competition from China’s Huawei which is far bigger. R&D being the DNA, write-offs cannot be ruled out in future.
 Given prudent management, healthy customer relationship, cost and capital efficient business model, company has a promising narrative. We recommend subscribe on the IPO.

Centrum Wealth Management has the following Views,

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Tejas would be the first listed player in optical networking equipment space and there are no listed comparable peers. At the
higher end of the price band of  Rs 257, the issue is valued at 14.1x EV/EBITDA and 24.7x P/E on FY17 (post dilution) basis.
Although not directly comparable, companies in the optical fibre space like Sterlite Technologies are trading at 11.4x EV/EBITDA
& 30.5x P/E on FY17 basis. Given the differentiated business model of the company and relatively short track record of
improving financials (last two years only) it is difficult to take a call on the valuation.
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CLSA is of the opinion of a rerating of Indian steel stocks. Confirmation of anti-dumping duties for the next four years has put a floor to Indian steel prices. Indian steel demand-supply is on the cusp of a multi-year tightening phase given lack of new capacity
additions.

Steel demand outlook is also improving with the government's affordable housing program and likely start of an investment cycle by
FY19. CLSA see potential for Indian steel valuation multiples to rerate.

It has the following recommendations,

BUY
Vedanta TP: Rs340 Upside: 45.7%
Tata Steel TP: Rs710 Upside: 44.9%
JSW Steel TP: Rs300 Upside: 53.6%
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India Stocks and Shares / Calculation of STT for In-The Money Options on Expiry
« Last post by resh on June 01, 2017, 03:19:31 PM »


Please note that whenever an option is exercised, the applicable STT rate is 0.125% on the settlement price (underlying closing price). It is advisable to square off in the money option by selling in live market (and not letting it expire) to avoid extraordinary high STT.

For Example:
On the day of expiry, you have an outstanding position in Nifty 5000 call and Nifty closes at 5050.

Case 1- If you square off this position by selling in live market at Rs. 50, then STT payable will be =Premium * qty * 0.05 %
= 50*75*0.05% = Rs 1.875

Case 2 – If you don’t sell in live market and leave the outstanding call position to expire, then STT payable will be = Settlement price * qty * 0.125%
= 5050*75*0.125% = Rs 473.4375

Please take note of above example and act accordingly.
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India Credit Cards / Personal & Business Loans / credit card settlement
« Last post by nnag on May 15, 2017, 10:54:20 PM »
Hi,

I have a credit card debt of 1,07,000 rs with Axis Bank. I was making regular payments...but due to unemployment, I could not pay the minimum dues for 4-5 months..since October 2016 I was paying the minimum dues regularly. However, in March 2017 i was late by 2 days to pay my minimum dues.now the bank has blocked my savings account too and asking me to pay the total outstanding that is 1,07,000 rs. At present this amount is not possible for me to pay. Thus, I want to go for a settlement. But I have little knowledge about how to go about it. If anyone here can tell me how I can proceed, that'll be great.

Thanks in advance.
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As the concept of Departmental stores picks pace in India, the volume of transacted business will also grow. In coming times, Departmental stores are bound to revolutionise customer’s buying experience by assuring quality and signalling product availability. However challenges lie in the robust management of such stores which if are to distinguish themselves from the prevalent Kirana Stores and Mom & Pop Stores need to adopt the best Global practices.

Amongst the many global best practices is the adoption of a full-proof Departmental Software.
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IPOs and Rights Issues / HUDCO Ltd - Review / Recommendation
« Last post by resh on May 07, 2017, 04:34:25 PM »
Here are the Research Reviews & Recommendations of the HUDCO Ltd IPO

Antique Stock Broking has the following View on the IPO

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Given the limited appraisal skills, HUDCO witnessed huge NPAs in its private sector portfolio. While it has stopped lending to this segment since 2013, re-starting it could be a risk. ALM mismatch and governmental disposition on allowing HUDCO to raise tax free bonds could result in margin volatility in the future. At the upper price band of Rs60 per share, the stock trades at 1.0x FY19e book. While comon with HFCs is absolutely unwarranted due to the fact that HUDCO doesn't lend directly to the home buyer, IPO valuations leave some upside for investors.

Dalal & Broacha are NEUTRAL on Hudco IPO

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Reported Gross NPA and Net NPA ratio are at 6.8% and 1.5%, respectively, with healthy coverage ratio of 79%. As per the disclosures provided in the offer document, there are two accounts which are under litigation not classified as NPAs. If classified, the Gross NPA and Net NPA ratio can deteriorate to 9.1% and 3.6%, respectively. At the higher end of the price band of the IPO, the valuation works out to 1.6x on P/ABV (i.e. after taking into account net NPA of 3.6%). NII growth of the company during FY12-16 is 5.5% and Net profit has grown at 6.9% during same period.

IIFL Analysts have the following recommendation on the Public Issue of HUDCO Ltd

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Given the reasonable validity for steady asset growth and better returns ratios, the IPO valuation at 1.5x FY17 P/ABV seems attractive. We recommend subscribe to the issue.

Gupta Equities has the following review,

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Housing and Urban Development Corporation Ltd (HUDCO) stands to gain from operating leverage and also rise in the business. At a P/E of 15.4x we believe that HUDCO at discount as compared to its domestic peers. We assign a Subscribe rating to the IPO.

ICICI Securities Analysts Kajal Gandhi, Vishal Narnolia and Vasant Lohiya have the following recommendation,

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At the IPO price band of | 56-60, the stock is available at a multiple of 1.4x 9MFY17 ABV (post issue) at the upper end of the price band. Post issue market capitalisation is at ~| 12011 crore.

Geojit Securities has the following Rating,

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At the upper price band, i.e. Rs60, the stock is available post-issue Adj P/BV multiple of 1.4x 9MFY17 which is attractive given its unique business model with presence in housing finance as well as urban infrastructure development. Valuation is also at a much reasonable discount to its peers, when considered on the post issue book value. Hence, we recommend ‘SUBSCRIBE’ to the issue, with a medium-to-long term perspective.

Joindre Capital Analyst Mr. Avinash Gorakshakar has the following view,

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Given the reasonable visibility for steady asset growth and better return ratios, the IPO valuation at 1.4-1.5x 9M FY17 P/ABV seems attractive. We recommend Subscribe. Hence looking at the long term prospects we recommend a SUBSCRIBE for HUDCO.

SPA Financial Advisors said,

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Company has very high capital adequacy ratio of ~65%, all of which is Tier I capital. 67% of total Loan Portfolio, is guaranteed by State Governments. Current leverage position at 3x provides enough room for future lending growth. At the issue price the valuation is 1.4x P/BV on FY16 numbers which is fair given the low leverage ratios and adequate PCR, hence we recommend to SUBSCRIBE to the issue as a good long term investment.
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In credit cards too, HDFC Bank is the market leader with a share of 31% (FY16) by number of cards outstanding making it the best positioned to capitalize on key transactions effected through online payment gateways; ecommerce players.

Moreover, it also ensures a huge merchant tie up that it has by virtue of its card dominance which it can leverage even more effectively as more transactions are routed digitally. It also allows the bank to provide its customers with the “extra’ discount when the customer is
doing online shopping through the bank’s portal.


Interestingly, HDFC Bank is already a prominent player (top 3) in the mobile banking space too with a ~18% share of all mobile transactions. This helps to further reinforce our view that as India increasingly shifts to using mobiles for transactions, HDFC Bank
may be one of the biggest beneficiaries of that change. Mobile banking together accounts for <1% of the total payments; but is likely to rise very rapidly in coming years. Hence, a dominant share of mobile, credit cards and payments markets positioned it uniquely as the possibly the only bank that is so well positioned to capitalize on the expected surge seen in digital banking.
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IPOs and Rights Issues / Avenue Supermarts / D-Mart Review - Recommendations
« Last post by resh on March 03, 2017, 12:06:26 PM »
Find all the Brokerage and Analyst Reviews and Recommendations of the Avenue Supermarts promoted D-Mart HyperMarket Retail Chain Review

ShareKhan has the following Review

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At the price band of Rs295-299 per share, the issue is priced at 52.6x and 51.9x its FY2016 EPS, respectively – a discount to some of its peers despite much better profitability and return ratios. Its track record of industryl eading performance and a reputed pedigree make it a quality investment option in the retail space.

Dalal & Broacha Analyst Kunal Bhatia said,

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Annualising 9MFY17 numbers Dmart's valuation stands at 36.1x its higher price band of Rs 299 and 35.6x its lower price band of Rs 295. The company would be raising Rs 18700mn of which Rs 10800 mn would be utilised for paying off debt (thus improving profitability) and Rs 3666mn towards further expansion. We expect the company to maintain similar of CAGR going forward. We recommend investors to SUBSCRIBE the issue.

Arihant Capital Markets said,

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Avenues Supermarts Ltd (ASL) which runs D'mart brand of Hybrid Supermarts in 9 states is the most profitable value retailer in India. ASL has consciously followed a strategy of 1) owning real estate in stores (7-7.5% of sales savings) 2) cluster based strategy focusing on a few states (Maharashtra and Gujarat are 82% of sales) 3) avoiding own labels in Food and Non Food FMCG 4) Everyday low prices and Everyday low costs which has enabled the company to achieve 14xinventory turns and ROE and ROCE of ~24%. D'mart is looking at calibrated store openings while retaining its focus on select geographies which should enable healthy growth in profitability. The stock is being offered at 35x9mFY17 EPS which we believe is reasonable given strong growth outlook, solid business model and healthy return ratios. Recommend Subscribe.

Emkay Analysts Sameer Kasbekar and Amit Purohit said,

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Given its growth momentum, gross/EBITDA margin profile, return ratios and inventory turns, ASL dwarfs most of its listed peers both domestic and international. We believe that the robust business model and focus on low costs will enable the company to report not only a strong profitable growth but also turn free cash positive in the near future. We assign a SUBSCRIBE rating to the IPO.

SMC has the following Review and Recommendation,

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On the lower end of the price band of Rs.295 the stock is priced at pre issue P/E of 31.62x on its FY17 EPS of Rs. 9.33.Post issue, the stock is priced at a P/E of 35.14x on its EPS of Rs. 8.39. Looking at the P/B ratio at Rs. 295, the stock is priced at P/B ratio of 8.69x on the pre issue book value of Rs. 33.93 and on the post issue book value of Rs. 62.59 , the P/B comes out to 4.71x.

Prabhudas Liladhar Analysts Amnish Aggarwal and Gaurav Jogani said,

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Everyday low prices and Everyday low costs which has enabled the company to achieve 14xinventory turns and ROE and ROCE of ~24%. D’mart is looking at calibrated store openings while retaining its focus on select geographies which should enable healthy growth in profitability. The stock is being offered at 35x9mFY17 EPS which we believe is reasonable given strong growth outlook, solid business model and healthy return ratios. Recommend Subscribe.

IndiaNivesh Analysts Saptarshi Mukherjee, Daljeet S. Kohli and Sriram said,

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Based on the stupendous track record of the company displayed by steady footprint expansion using a distinct store acquisition strategy and ownership model backed by optimal product assortment coupled with strong promoter background, experienced and entrepreneurial management team, we recommend investors to SUBSCRIBE to the issue.

Angel Broking Analyst Amarjeet S Maurya said,

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At the upper end of the price band, the pre-issue P/E works out to be 32.5x its annualised 9MFY2017 earnings, which is lower
compared to P/E multiple of its peers i.e. Trent - 73.9x, Shoppers Stop – 123.8x and Future Retail 36.5x. Better RoE profile, promoter’s strong background, strategically located stores, intense focus on maintaining lower costs and strong brand perception are the compelling factors indicating that ASL is a long term story that will unfold going ahead. Thus, we recommend a SUBSCRIBE on this issue.

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